After the surprisingly large 12% swing against Labor in Saturday’s Altona by-election, Ted Baillieu’s Victorian Liberals are suddenly feeling they are in the contest at the November state election.

And Crikey can reveal Baillieu’s secret weapon: a huge $58 million share portfolio controlled by the Victorian division of the Liberal Party.

Australia has long had one of the worst disclosure regimes for campaign finance of any Western democracy, but the Victorian Libs are to be commended for the level of disclosure provided by the Cormack Foundation.

As this story from The Age in 1996 explains, the Cormack Foundation was established in 1988 after the sale of radio station 3XY to Paul Dainty for $14 million.

With conservative directors such as ANZ chairman Charles Goode, former WMC CEO Hugh Morgan and Rupert Murdoch’s brother-in-law John Calvert-Jones, the foundation has distributed more than $25 million to the Liberal Party over the past 22 years and also built up the capital to $58 million spread across 16 blue-chip investments.

How do we know that? Simple, just check out the Cormack Foundation’s 2008-09 annual return to the AEC, which was released on February 1.

Because Cormack discloses the dates of individual dividend payments, it is possible to calculate how many shares they hold in each company. Here is the state of play as at 11.30 this morning:

Combank: 285,000 shares worth $15.15 million
NAB: 319,000 shares worth $8.26 million
BHP-Billiton: 200,000 shares worth $8.19 million
Wesfarmers: 253,000 shares worth $7.44 million
Rio Tinto: 81,000 shares worth $5.85 million
ANZ Bank: 125,000 shares worth $2.76 million
Westpac: 100,000 shares worth $2.54 million
Fosters: 250,000 shares worth $1.39  million
Woolworths: 50,000 shares worth $1.31 million
Brambles: 150,000 shares worth $1.05 million
Transurban: 200,000 shares worth $1.04 million
QBE Insurance: 35,000 shares worth $0.8 million
WA News: 100,000 shares worth $0.75 million
Telstra: 208,000 shares worth $0.65 million
GWA International: 200,000 shares worth $0.63 million
Alumina: 250,000 shares worth $0.4 million

Total: $58.2 million

The contrast with Labor Holdings, the investment fund set up with the support of  Wayne Swan and Kevin Rudd after the 1987 sale of radio station 4KQ for $16 million, Cormack is far more transparent, risk-averse and effective when it comes to stock picking.

Labor Holdings used to have more than $50 million in net assets as was explained in this piece for The Sunday Age two years ago.

Alas, huge handouts to Labor for the electoral triumphs of Rudd and Anna Bligh, plus an excessively geared portfolio and parochial stock selections that went wrong has seen it slump back to below $30 million, according to Natsaha Bita’s story last week in The Australian.

While Cormack has no debt, you can see from the hand-scrawled return by the comrades running Labor Holdings that they are hocked to the turn of $11.35 million. That was the wrong way to play the GFC, suggesting the love affair with debt that has infected the Rudd and Bligh governments permeated all the way down to the party’s investment strategies.

And while we can safely confirm that Cormack, assuming no sales since June 30 last year, owns shares in the Big Four banks worth $28 million, Labor Holdings deliberately muddies the waters between dividend income and interest on deposits.

The best decision Cormack ever made was moving more aggressively into bank stocks through the 1990s when the Howard Government allowed the world’s most lucrative and expensive banking oligopoly to emerge.

It’s a decision that makes this press release issued 12 months ago by Michael Ronaldson, shadow special minister of state, laughably hypocritical given the attempt to claim the bank guarantee was a conflict of interest due to the Labor Holdings bank investments.